The Credit Union National Association (CUNA) appreciates the opportunity to comment on
the agencys interim final rule implementing amendments to the Federal Credit Union (FCU)
Act made by the Financial Services Regulatory Relief Act of 2006 (Reg Relief Act).
Specifically, the interim final rule covers: appealing from an NCUA Board decision relating
to any claim for insurance coverage; expansion of NCUA enforcement authority with respect to
the termination of the insured status of any insured credit union; and clarification of the
NCUA Boards suspension, prohibition and removal authority. By way of background, CUNA
represents approximately 90 percent of our nations 8,700 state and federal credit unions,
which serve nearly 87 million members.

Summary of CUNAs Comments

CUNA agrees with the decision to move judicial venue to appeal a final board decision
regarding share insurance coverage to the appropriate U.S. District Court. This venue change
should provide a more expedient due process route for credit unions that have had their share
insurance coverage terminated.

CUNA supports the rules revised language regarding the Boards authority to take
enforcement action. CUNA urges NCUA to provide more guidance with respect to what violations
would lead to termination of insurance coverage.

CUNA has no concerns with the provision clarifying the Boards suspension, prohibition
and removal authority with regard to institution-affiliated parties provided the individual
receives due process at the administrative and/or federal court level.

Appeal from an NCUA Board decision relating to any claim for insurance coverage

NCUAs regulations currently provide that an appeal from a final NCUA Board determination
regarding share insurance coverage are to be reviewed by the U.S. Court of Appeals for the
District of Columbia or the court of appeals for the federal circuit where the credit unions
principal place of business is located. The interim final rule revises the regulation to state
that the appropriate venue for seeking such judicial review is the U.S. district court for the
federal judicial district where the principal place of business of the credit union is located.

There are two primary reasons why CUNA is supportive of the change of venue to a lower
(district) court. First, as opposed to one court, there are a larger number of U.S. District
Courts available to hear such appeals and hear them in a more expeditious manner. Credit unions
would have the opportunity to appeal an adverse decision to the appropriate U.S. District Court of
Appeals. Overall, this new provision should provide for a more thorough review to ensure due
process. Second, this will be more convenient for legal counsel who will not have to travel to
represent credit unions in these cases, which will reduce legal costs.

Expansion of enforcement authority

Under the interim final rule, the NCUA Board may terminate the insured status of any insured
credit union for violation of any condition imposed by the Board in connection with any action on
any application, notice, or other request by the credit union or an institution-affiliated party.
In addition, such violations can serve as the basis for cease and desist orders, removal and
prohibition orders, and civil monetary penalties. Previously, such actions could only be taken
upon a violation of conditions imposed in the granting of any application or other request by the
credit union.

While the language in the regulation tracking the Reg Relief Act does broaden NCUAs authority,
it does not appear to signal a significant change in the Boards actual enforcement actions. The
Board has long-standing authority to regulate and take enforcement actions as it deems
necessary.

However, CUNA encourages NCUA to provide examples or issue guidelines regarding what types of
violations the agency would consider so egregious as to serve as the basis of such orders or
penalties and rise to the level of termination of insured status. Doing so would provide a
fairer, more consistent process in termination action at the administrative level as well as
during any subsequent judicial appeal process.

Clarification of suspension, prohibition and removal authority

The interim final rule clarifies the NCUA Boards authority to issue Orders of Suspension,
Prohibition and Removal against institution-affiliated parties regardless of whether: (a) the
subject of the Order remains affiliated with any credit union at the time the Order is considered
or issued or (b) the credit union at which the individual was an institution-affiliated party at
the time of the offense remains in existence at the time the Order is considered or issued.

Section 1786 (i)(1)(A) states that Whenever any institution- affiliated party is charged in
any information, indictment, or complaint, with the commission of or participation in a crime
involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding
one year under State or Federal law, the Board may, if continued service or participation by such
party may pose a threat to the interests of the credit unions members or may threaten to impair
public confidence in the credit union, by written notice served upon such party, suspend such
party from office or prohibit such party from further participation in any manner in the conduct
of the affairs of the credit union. These provisions appear to codify current NCUA policy of
extending its authority to cover institution-affiliated parties.

CUNA believes this provision is important to protect the integrity and public confidence in the
credit union movement. Such parties should be prevented from patronizing former clients for their
business endeavors. CUNA supports this broadening of authority as long as the institution-
affiliated individuals rights are protected and appropriate due process is accorded in the
administrative and judicial venues.

In conclusion, CUNA again commends NCUA for taking swift action to implement the provisions in
the Reg Relief act relevant to the agency and credit unions. We have no objections with the
interim final rule as written. Thank you for the opportunity to share our comments. If you have
any further questions, please feel free to contact CUNAs SVP and Deputy General Counsel Mary Dunn
by phone at (202) 508-6736 or by e-mail at
mdunn@cuna.com or me by phone at (202) 508-6743 or by
e-mail at corr@cuna.com.